Disbursement under Bangladesh Bank’s Tk62,000 crore stimulus package to revive closed factories, create jobs and boost economic activity has remained sluggish, with less than Tk10,000 crore reaching borrowers directly in four months.
Of the Tk20,000 crore allocated for closed industrial and service-sector units, only Tk50 crore has been disbursed, highlighting the challenges in restarting shuttered businesses.
Business leaders and bankers have blamed each other for the slow progress. Businesspeople allege that banks are reluctant to lend, while bankers cite mounting non-performing loans, insufficient collateral and incomplete documentation as major obstacles to loan approvals. The requirement to withdraw pending cases has also complicated the process.
Business leaders have called for relaxed lending conditions, including easing restrictions linked to defaulted loans, assessing the viability of closed factories before financing and ensuring faster loan approvals and disbursements.
Anwar-ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, said banks were unwilling to take risks by lending to closed factories. He said support should also be extended to businesses facing working-capital shortages and those at risk of closure.
Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said reopening closed factories was relatively easier than setting up new ones.
He called for some lending conditions to be relaxed to accelerate disbursement under the stimulus package.
Former Bangladesh Bank chief economist Dr Mostafa K Mujeri stressed the need for proper scrutiny before extending loans to eligible entrepreneurs. Lending merely to meet disbursement targets could create further problems in the banking sector, he warned.
Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said loans were being disbursed under the fund and applications submitted by banks were being reviewed and processed promptly.
He also said banks could file cases again if applications were rejected after the withdrawal of existing cases.
The package caps the maximum interest rate on loans at 7% and aims to create employment for 2.5 million people.